Shivkumar Lakshman, CHENNAI V. ITO, CHENNAI

ITA 402/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90400 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 25-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: HEMALATHA K ACA
• Keywords: Sale consideration of property below Jantri Value; Cost of acquisition
• Section: 50C; 54F; 234B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.402/MDS/2015 ( )( / ASSESSMENT YEAR : 2010-11 SHRI SHIVKUMAR LAKSHMAN, C1, 28, APOLLO LUMIERE, 3 RD MAIN ROAD, KASTURBA NAGAR, CHENNAI - 600 020. PAN : ADEPL 1876 A V. THE INCOME TAX OFFICER, INTERNATIONAL TAXATION I, CHENNAI - 600 034. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : MS. HEMALATHA.K, ACA -.+, / 0 / RESPONDENT BY : SH.N. MADHAVAN, JCIT 1 / 2% / DATE OF HEARING : 19.05.2015 3') / 2% / DATE OF PRONOUNCEMENT : 29.05.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-16, CHENNA I, DATED 23.01.2015, AND PERTAINS TO ASSESSMENT YEAR 2010-11 . 2 I.T.A. NO.402/MDS/15 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO DISALLOWANCE OF INDEXED COST OF IMPROVEMENT TO THE EXTENT OF ` 3,07,946/-. 3. MS. HEMALATHA.K, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE SOLD AN IMMOVABLE PROPE RTY FOR A TOTAL CONSIDERATION OF ` 90 LAKHS AND CLAIMED INDEXED COST OF ACQUISITION OF ` 3,70,190/-. THE ASSESSEE ALSO CLAIMED COST OF IMPRO VEMENT TO THE EXTENT OF ` 3,07,946/-. ACCORDING TO THE LD. REPRESENTATIVE, T HE ASSESSEE HAS DISCLOSED LONG TERM CAPITAL GAIN TO TH E EXTENT OF ` 83,62,888/- AND ALSO CLAIMED EXEMPTION UNDER SECTIO N 54F OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') ON THE IN VESTMENT MADE IN THE IMMOVABLE PROPERTY BY HIM, WHICH WAS PURCHASED FROM M/S APPASAMY REAL ESTATES LTD. HOWEVER, THE ASSESSING OFFICER RE- FIXED THE SALE VALUE AT ` 1,06,17,750/- AS PER THE GUIDELINE VALUE ADOPTED BY THE SUB-REGISTRAR, BY APPLYING THE PROVI SIONS OF SECTION 50C OF THE ACT. THE LD. REPRESENTATIVE FURTHER SU BMITTED THAT THE ASSESSEE CLAIMED THAT AN AMOUNT OF ` 2,25,600/- HAVING SPENT IN IMPROVEMENT OF THE PROPERTY. HOWEVER, THE SAME WAS DISALLOWED BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASS ESSEE HAS NOT FILED ANY EVIDENCE. ACCORDING TO THE LD. REPRESENT ATIVE, THE ASSESSEE HAS PRODUCED LETTER FROM THE PERSON WHO AC TUALLY MADE 3 I.T.A. NO.402/MDS/15 THE IMPROVEMENTS. THEREFORE, IT MAY NOT BE CORRECT TO SAY THAT THE ASSESSEE HAD NOT PRODUCED ANY EVIDENCE. THUS, ACCO RDING TO THE LD. REPRESENTATIVE, THE DISALLOWANCE MADE BY THE AS SESSING OFFICER WITH REGARD TO THE INDEXED COST OF IMPROVEMENT TO T HE EXTENT OF ` 3,07,946/- IS NOT JUSTIFIED. 4. ON THE CONTRARY, SHRI N. MADHAVAN, THE LD. DEPAR TMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE CLAIMED IMPROVEMENTS TO THE EXTENT OF ` 3,07,946/-. HOWEVER, THE ASSESSING OFFICER DISALLOWED THE SAME. THE ASSESSEE HAD NOT PRODUCED ANY EVIDENCE BEFORE THE LOWER AUTHORITIES. THE BILLS, VOUCHERS, ETC. FOR THE IMPROVEMENT SAID TO BE MADE TO THE LANDED PROPE RTY WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER. THE LD. D.R . FURTHER SUBMITTED THAT A STATEMENT FROM SHRI T. KARTHIK WAS RECORDED AND HE COULD NOT THROW ANY LIGHT WITH REGARD TO IMPROVE MENTS SAID TO BE MADE BY THE ASSESSEE. THE LD. D.R. FURTHER SUBMITT ED THAT WHAT WAS SOLD BY THE ASSESSEE WAS A VACANT LAND. THEREF ORE, THERE IS NO QUESTION OF ANY IMPROVEMENT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE ASSES SEE CLAIMED A SUM OF ` 3,07,946/- TOWARDS COST OF IMPROVEMENT. HOWEVER, T HE SAME WAS DISALLOWED BY THE ASSESSING OFFICER. THE ASSESSING 4 I.T.A. NO.402/MDS/15 OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE IMMOVABLE PROPERTY WAS DESCRIBED AS FARM LAND IN THE SALE DEED. THE ASSESSING OFFICER FURTHER FOUND THAT THERE WAS NO BUILDING ON THE SAID PROPERTY. HENCE, THERE COULD NOT HAVE BEE N ANY IMPROVEMENT. ACCORDINGLY, HE DISALLOWED THE CLAIM. FROM THE MATERIAL AVAILABLE ON THE RECORD IT APPEARS THAT TH E ASSESSEE HAD FILED A COPY OF THE LETTER ALONG WITH CERTAIN BILLS AND VOUCHERS BEFORE THE CIT(APPEALS) AND THE CIT(APPEALS) ALSO FORWARDE D THE SAME TO THE ASSESSING OFFICER. THE ASSESSING OFFICER, AFTE R EXAMINING THE BILLS AND VOUCHERS AND OTHER DOCUMENTS, CAME TO A C ONCLUSION THAT THE CLAIM COULD NOT BE ACCEPTED. THE FACT REMAINS THAT THE BILLS AND VOUCHERS WERE PRODUCED BEFORE THE CIT(APPEALS) AND THE SAME WERE SENT TO THE ASSESSING OFFICER. THE ASSESSEES CLAIM WAS ONLY A SUM OF ` 3,07,946/- AS COST OF IMPROVEMENT. IMPROVEMENT CAN BE MADE EVEN TO THE FARM LAND. IT IS NOT NECESSARY TH AT THE IMPROVEMENTS SHOULD BE MADE ONLY TO THE BUILDING. SUPPOSE, THE VACANT LAND IS LOW LYING AND IT REQUIRES FENCING, T HE ASSESSEE HAS TO NECESSARILY INCUR EXPENDITURE TO KEEP THE LAND TO A MARKETABLE CONDITION. UNDER NORMAL CIRCUMSTANCES, THIS TRIBUN AL WOULD HAVE REMITTED BACK THE MATTER TO THE FILE OF THE ASSESSI NG OFFICER FOR VERIFICATION. SINCE WHAT WAS CLAIMED WAS ONLY ` 3,07,946/-, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IT MAY N OT BE NECESSARY TO 5 I.T.A. NO.402/MDS/15 REMIT BACK THE MATTER IN VIEW OF THE SMALLNESS OF T HE AMOUNT CLAIMED BY THE ASSESSEE. ACCORDINGLY, THIS TRIBUNA L IS OF THE CONSIDERED OPINION THAT THE ASSESSEE WOULD HAVE SPE NT ` 3,07,946/- AS PER THE LETTER FILED BEFORE THE LOWER AUTHORITIE S WITH REGARD TO IMPROVEMENTS. THEREFORE, THERE IS NO JUSTIFICATION IN DISALLOWING THE CLAIM OF THE ASSESSEE. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO ALLOW THE CLAIM OF THE ASSESSEE TOWARDS COST OF IMP ROVEMENTS TO THE EXTENT OF ` 3,07,946/-. 6. THE NEXT GROUND OF APPEAL IS WITH REGARD TO COMP UTATION OF CAPITAL GAIN. 7. MS. HEMALATHA.K, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE SOLD THE PROPERTY FOR ` 90 LAKHS. THE ASSESSING OFFICER BY PROVISIONS OF SECTION 50C OF T HE ACT HAS TAKEN THE SALE CONSIDERATION AT ` 1,06,17,750/- AND COMPUTED EXCESS CAPITAL GAIN. ACCORDING TO THE LD. REPRESENTATIVE, FOR THE PURPOSE OF THE CONSIDERING EXEMPTION UNDER SECTION 54F OF THE ACT, THE SALE CONSIDERATION HAS TO BE TAKEN AS REFLECTED IN THE S ALE DEED AND NOT BY APPLYING THE PROVISIONS OF SECTION 50C OF THE AC T. 6 I.T.A. NO.402/MDS/15 8. ON THE CONTRARY, SHRI N. MADHAVAN, THE LD. DEPA RTMENTAL REPRESENTATIVE, SUBMITTED THAT SECTION 50C PROVIDES FOR ADOPTING THE VALUE DETERMINED BY THE SUB-REGISTRAR FOR REGIS TERING DOCUMENT IN CASE THE VALUE CLAIMED BY THE ASSESSEE IS LOWER. IN THIS CASE, THE SALE CONSIDERATION CLAIMED BY THE ASSESSEE WAS ONLY ` 90 LAKHS. HOWEVER, THE SUB-REGISTRAR ADOPTED THE VALUE AT ` 1,06,17,750/-. THEREFORE, THE LD. D.R. SUBMITTED THAT THE ASSESSIN G OFFICER HAS RIGHTLY ADOPTED THE PROVISIONS OF SECTION 50C OF TH E ACT. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. THE QUEST ION ARISES FOR CONSIDERATION IS THAT FOR THE PURPOSE OF GRANTING D EDUCTION UNDER SECTION 54F OF THE ACT, WHETHER THE SALE CONSIDERAT ION DISCLOSED IN THE SALE DEED HAS TO BE TAKEN OR THE VALUE ADOPTED BY THE SUB- REGISTRAR FOR REGISTERING THE DOCUMENT HAS TO BE TA KEN. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT FOR THE PURPOSE OF GRANTING DEDUCTION UNDER SECTION 54F OF THE ACT, THE VALUE D ISCLOSED IN THE SALE DEED HAS TO BE ADOPTED RATHER THAN THE VALUE D ETERMINED BY THE SUB-REGISTRAR ON THE BASIS OF GUIDELINE VALUE. ACTUAL SALE CONSIDERATION AS REFLECTED IN THE SALE DEED HAS TO BE ADOPTED IN THE ABSENCE OF ANY OTHER MATERIAL TO INDICATE THAT THE ASSESSEE HAS RECEIVED ANY ON-MONEY OVER AND ABOVE THE AMOUNT DIS CLOSED IN THE 7 I.T.A. NO.402/MDS/15 SALE DEED. IN THIS CASE, IT IS NOBODYS CASE THAT THE ASSESSEE RECEIVED ON-MONEY OVER AND ABOVE THE SALE CONSIDERA TION DISCLOSED IN THE SALE DEED. THEREFORE, THIS TRIBUNAL IS OF T HE CONSIDERED OPINION THAT THE ASSESSING OFFICER HAS TO ADOPT THE ACTUAL SALE CONSIDERATION OF ` 90 LAKHS FOR THE PURPOSE OF CONSIDERING THE CLAIM OF EXEMPTION UNDER SECTION 54F OF THE ACT. 10. IN VIEW OF THE ABOVE, THE ORDERS OF THE LOWER A UTHORITIES ARE SET ASIDE AND THE ASSESSING OFFICER IS DIRECTED TO ADOPT THE ACTUAL SALE CONSIDERATION FOR THE PURPOSE OF CONSIDERING E XEMPTION UNDER SECTION 54F OF THE ACT. 11. THE NEXT GROUND OF APPEAL IS WITH REGARD TO LEV Y OF INTEREST UNDER SECTION 234B AND 234C OF THE ACT. 12. WE HAVE HEARD BOTH LD. REPRESENTATIVE FOR THE A SSESSEE AND THE LD. D.R. LEVY OF INTEREST UNDER SECTION 234B A ND 234C IS MANDATORY AND CONSEQUENTIAL. THEREFORE, WHILE GIVI NG EFFECT TO THE ORDER OF THIS TRIBUNAL, THE ASSESSING OFFICER SHALL RE-COMPUTE THE INTEREST UNDER SECTION 234B AND 234C OF THE ACT. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. 8 I.T.A. NO.402/MDS/15 ORDER PRONOUNCED ON 29 TH MAY, 2015 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) (. !'# ! ) ( . . . ) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 29 TH MAY, 2015. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-16, CHENNAI-34 4. 1 92 /CIT (INTERNATIONAL TAXATION), CHENNAI 5. 7: -2 /DR 6. ( ; /GF.